STAG Industrial, Inc. STAG recently announced its plans to raise fresh capital by issuing 6.5 million shares of common stock through a public offering. The company expects gross proceeds of $190.1 million.
Further, as part of the offering, STAG Industrial will give underwriters a 30-day option to purchase up to an additional 975,000 shares of its common stock. The offering, subject to fulfillment of customary closing conditions, is expected to close on Apr 4.
Net proceeds of the offering will be used to repay outstanding balance under the company’s existing $500 million-unsecured credit facility. In addition, amounts will be used for working capital and general corporate purposes. Also, it will be used to fund acquisitions in future.
STAG Industrial focuses on the acquisition and management of single-tenant industrial properties across the United States. Amid industrial tailwinds, strategic acquisitions position the company to take advantage of the growing demand for industrial space.
In fact, high-consumer spending, e-commerce boom, as well as a healthy manufacturing environment amid recovering economy and job market are spurring demand for the industrial real estate category. This demand upside is creating remarkable growth opportunities for industrial REITs, including Terreno Realty TRNO, Duke Realty Corp. DRE and Prologis PLD. Hence, STAG Industrial’s efforts to expand its portfolio on the back of accretive acquisition opportunities will drive external growth.
The latest common stock offering will boost the company's financial flexibility and help meet its financial obligations efficiently. Moreover, it provides ample scope for deploying capital for long-term growth opportunities and rewarding higher returns to stockholders, at the same time.
This Zacks Rank #3 (Hold) stock has gained around 23.3% over the past three months, outperforming 17.9% growth recorded by the industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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